These are just some of the disturbing findings of a new report on the digital economy from the UN trade agency UNINFORMEDwho insists that the The booming sector’s negative impact on the environment must be taken more seriously – and curbed by investments in renewable energy sources.
“The rise of technologies such as artificial intelligence and cryptocurrency, cryptocurrency mining, has significantly increased energy consumption“, said UNCTAD head Rebeca Grynspan.
Joy of power
“For example, energy consumption from Bitcoin mining increased by a factor of 34 between 2015 and 2020, reaching approximately 121 terawatt hours… The energy consumption from Bitcoin mining is higher than what Belgium or Finland consume in a year,” the UNCTAD secretary-general told reporters in Geneva.
Today, some 5.4 billion people use the internet and the global digital economy is booming, with clear benefits for many. In value terms alone, business e-commerce sales rose from $17 trillion in 2016 to $27 trillion in 2022 across 43 countries, Ms. Grynspan noted.
“We talk a lot about how digital technologies can reduce paper consumption, improve energy efficiency, and help reduce greenhouse gas emissions in transportation, construction, agriculture, and energy.
“But the downsides are not talked about as much,” she said, stressing that digitalization is “very materialistic” and requires huge amounts of carbon-rich electricity.
To counter this environmental threat and support a fair and environmentally friendly digital economy, UNCTAD has Digital Economy Report 2024 offers policy proposals regarding precious minerals used in the production of electronic devices, including mobile phones, and other essential natural resources, such as water.
The energy hunger of data centers
According to UNCTAD, global data centers consumed 460 terawatt hours in 2022, which is equivalent to the power consumed by 42 million households in the United States in a year. This figure is expects this to double by 2026.
The UN agency also cites estimates that The digital sector is responsible for 1.5 to 3.2 percent of global greenhouse gas emissionssimilar to that of air transport and shipping.
Between 2018 and 2022, the electricity consumption of 13 major data center operators will more than double, underscoring the urgent need to address the energy and water footprint of these technologies.
“Google announced that in 2022, its total water consumption in its data centers and offices was 5.6 billion gallons (about 21.2 million cubic meters). For the same year, Microsoft reported that its water consumption was 6.4 million cubic meters,” Ms. Grynspan said, adding that The water consumption of such facilities has recently led to tensions within local communities in several countries.
According to Microsoft, an estimated 700,000 liters of clean, fresh water were needed for the ChatGPT-3 training alone, the UNCTAD chief also indicated.
Increase in e-commerce and e-waste
E-commerce has grown dramatically, with online shoppers growing from less than 100 million in 2000 to 2.3 billion in 2021, the report said. This growth has led to a 30 percent increase in digital-related waste from 2010 to 2022, amounting to 10.5 million tons globally.
“The management of digital waste remains inadequate. This is a major problem given the pollution it generates and its impact on the environment,” said the UNCTAD Secretary-General.
The report shows that developed countries generate 3.25 kg of digital waste per person, compared to less than 1 kg in developing countries and only 0.21 kg in the least developed countries. This is another indicator of the unequal distribution of the benefits that digitalisation brings.
Critical minerals
According to the report’s authors, the World Bank estimates that demand for minerals needed for digitalization, such as graphite, lithium and cobalt, could increase by 500 percent by 2050.
Developing countries play a crucial role in the global supply chain for transition minerals and metals, which are highly concentrated in a few regions.
Africa’s vast mineral deposits, which are essential to the global transition to low-carbon and digital technologies, include cobalt, copper and lithium, for example, which are crucial to a sustainable energy future.
The continent is home to significant reserves: 55 percent of the world’s cobalt, 47.65 percent of its manganese, 21.6 percent of its natural graphite, 5.9 percent of its copper, 5.6 percent of its nickel and 1 percent of its lithium.
© WHO/Abraham Thiga Mwaura
An employee of a recycling company in Ghana takes apart appliances in a recycling store.
Development opportunities
“The increased demand for critical minerals presents an opportunity for resource-rich developing countries to add more value to extracted minerals, diversify their economies and enhance their development. But technology needs to be transferred and made more efficient to be compatible with environmental and climate change objectives,” said Secretary-General Grynspan.
Amid the current global crises, limited fiscal space, slow growth and high debt, developing countries should maximise this opportunity through domestic processing and production, the report’s authors suggest. This would help them secure a larger share of the global digital economy, generate government revenues, finance development, overcome commodity dependency, create jobs and raise living standards.
Rising global demand for clean energy raw materials already encourages foreign direct investment in Latin America, accounting for 23 percent of the value of new projects in the region over the past two years, the report found.
Factors of success
UNCTAD suggests new business models and strong policies to make digital growth more sustainable. The clear recommendations from the UN trade and development experts to the world are:
– usage circular economy modelswith an emphasis on recycling, reuse and recovery of digital materials to reduce waste and environmental damage;
– optimize resources by making plans to use resources more efficiently and reduce overall usage;
– tightening of regulationsenforce stricter environmental standards and regulations to reduce the ecological impact of digital technologies;
– Invest in renewable energysupport research and development of energy-efficient technologies and sustainable digital practices;
– promote international cooperationencourage countries to work together to ensure equitable access to digital technologies and resources and to address global challenges related to digital waste and resource extraction.
“The digital economy is crucial for global growth and development opportunities, so we must implement practices that take us to a win-win situation and do not conflict with our equally important goals of environmental sustainability and our commitments on climate change,” concluded Rebeca Grynspan.
